The Eminem decision and National’s electoral return

Written By: - Date published: 4:20 pm, December 19th, 2018 - 27 comments
Categories: elections, Media, national, same old national, Steven Joyce - Tags:

The Court of Appeal has ruled on the Eminem v National case and reduced the damages from $600,000 to $225,000.

The salient passage of the decision was this passage:

[123] Mr Gough considered that the political use of the licensed work would not warrant an increase in the licence fee. For the reasons we have explained that is not our view. Consequently an upward adjustment would be required to his estimate to reflect the objective concern which a licensor would have about the future licensing implications of use in a divisive context. However it appears to us that the “decent fee” to which Mr Gough referred in re-examination did not reflect any discount for short duration which he recognised in his brief.

[124] Political usage was a factor in Mr Donlevy’s assessment, no doubt influenced by the statement about reluctance in the brief to experts. However it is apparent that he factored in not only objective but also subjective reluctance on the part of the licensor. Furthermore he included in his key factors the point that the advertisement used was a sound-a-like or re-recording that was not produced under the control of the artist. As Mr Donlevy explained recourse to such factors had outweighed the relevance of the smaller New Zealand territory in his assessment.  Reflecting our conclusions on the relevance of those considerations, deductions must be made from his estimate of the fee.

[125] Once appropriate allowance is made for those adjustments to Mr Gough’s and Mr Donlevy’s estimates we consider that the evidence on both sides of the case supports a finding of a reasonable licence fee for the use in the advertisement primarily in the New Zealand territory of NZ $225,000. That assessment also recognises the point made in Copinger that the licence terms must reflect the actual infringement. Hence our conclusion takes account of both the duration of the infringement and the fact that the licensed work was not the music and lyrics of Lose Yourself but part only of the music.

I am sure that a few within National’s ranks, particularly Steven Joyce, breathed a sign of relief.

But I have this nagging feeling that there are still issues that National will need to address that will involve not only the signing of a big albeit reduced cheque.

This is because National’s return for the 2014 election may no longer be accurate.  And it may have blown its spending cap.

Following is an entry from its 2014 electoral return.

Stan 3 Limited was the first third party in the original case and I presume this is what they paid for the eminemesque track that they thought was pretty legal.

The Court of Appeal decision means that National effectively has to pay $225,000 for music for campaign purposes.  I presume they will seek and are entitled to a discount from Stan 3 Limited for selling them a dodgy music track.

So why is this significant?

In 2014 National ran 64 electoral candidates.  The spending cap was $1,091,000 for the party plus $25,700 per electorate candidate making a total of $2,735,800.  They went close to this limit and declared spending of $2,556,473.30.

And if you add to this sum the recently confirmed Eminem bill and subtract the Stan 3 bill you get …

$2,765,817.10

Which is above the cap.

Looks like National may have a few problems to sort out.  The first one being does it file an amended return.  And how Eminem gets paid so late and how it happens without someone committing a corrupt practice.

I might be wrong.  But I suspect someone in National’s ranks may want to lose themselves.

27 comments on “The Eminem decision and National’s electoral return ”

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  1. Mr Marshy 1
    19 December 2018 at 4:33 pm

    Gotta love socialists, when all they have to report on is a party and its promo song. Sad little bunch.

  2. miravox 2
    19 December 2018 at 5:10 pm

    I guess now the person responsible is gone, they’ll argue it’s not their fault?

    I don’t know the penalty, but would love if it was the overspend was deducted from the next election spending cap.

    • mickysavage 2.1
      19 December 2018 at 7:46 pm

      The problem as I see it is that National now has a bill to pay for campaign expenses but as soon as it pays the bill it blows its spending cap. What can it do? It looks like the person paying this particular bill will be engaged in a corrupt practice. And leave will be needed. There are some quite juicy legal issues at play here.

  3. SHG 3
    19 December 2018 at 5:35 pm

    Has Winston paid his money back yet?

  4. SaveNZ 4
    19 December 2018 at 7:13 pm

    Ha Ha. And the rest of the politicians and the public and the media need to hold them to account for cheating. Especially when it is becoming common aka Brexit that political parties are cheating on this rule! Much greater penalties need to be made to stop this practise!

  5. Chris T 5
    19 December 2018 at 7:53 pm

    That is……kinda fairly desperate

  6. Mrs Muggins 6
    19 December 2018 at 8:31 pm

    “The Electoral Commission says damages awarded by a court for breach of copyright would not be an election expense for the purposes of a party’s return of election expenses.”

    From NBR – https://www.nbr.co.nz/story/nats-eminem-bill-drops-appeal

    • Muttonbird 6.1
      19 December 2018 at 8:40 pm

      Interesting precedent the Electoral Commission has set there.

    • alwyn 6.2
      19 December 2018 at 8:44 pm

      You are a spoilsport aren’t you?
      Poor old Mickys was so sure he had found something to say about Electoral Law and it appears he isn’t too knowledgable.
      Anyway, while he is at it can he explain what the Labour Party did in 2005 about going over the limit with the money they pinched to pay for the pledge card.
      I know that made the source of the money legal but how did they get away with having gone over the limit for the election as a whole?

      • mickysavage 6.2.1
        19 December 2018 at 8:55 pm

        Reread the post and explain why I am wrong.

        Nice diversion to 2005 tho …

        • alwyn 6.2.1.1
          20 December 2018 at 9:19 am

          The whole gist of your argument is that the National Party should have included these damages in their electoral return and that doing so would have taken them over the limit of expenditure.
          Well, according to the Electoral Commission they didn’t have to declare them and they didn’t have to count them in their expenditure.
          A fail on both counts for you.
          But I don’t suppose you will understand.

          By the way, why don’t you enlighten us on how the Labour Party avoided prosecution for spending more than the legal limit in 2005?
          Was it really something as simple as simply putting in the return very late so that it was after the cut-off date for prosecution? Surely the great legal minds in the party could have been more inventive than that.

          • mickysavage 6.2.1.1.1
            20 December 2018 at 9:33 am

            The whole gist of my argument is that National may be obliged to allow for this cost in its electoral return. My post has all sorts of caveats to it. Nowhere do I express a firm view. Rather I point out what could be a problem.

            And I am not sure the electoral commission is right. If you look at the definition of “Advertising expenses” in section 3A it includes the following:

            “the reasonable market value of any material used for or applied towards the advertisement, including any such material that is provided free of charge or below reasonable market value”.

            The Court has expressly ruled on the reasonable market value of the music.

            As for the 2005 example it was a while ago. If you believe so vehemently that that previous incident was wrong then shouldn’t you concede this incident is also wrong?

            • alwyn 6.2.1.1.1.1
              20 December 2018 at 12:25 pm

              “shouldn’t you concede this incident is also wrong?”.
              Of course I think it was wrong. They should have been more careful.
              The 2005 case was, of course quite deliberate.
              I presume you are willing to concede that the 2005 case was wrong?

  7. greywarshark 7
    20 December 2018 at 8:58 am

    That sounds pretty legal, should go down well with this high-minded National Party. /sarc

  8. Gareth 8
    20 December 2018 at 1:23 pm

    Maybe while they’re updating their 2014 election expenses return, they can explain why their 2017 return doesn’t add up either.

    Part G on p10 has some weird numbers:

    Donations exceeding 5000 but not exceeding 15000 – 438 donations totalling 2087864.35.
    Donations exceeding 1500 but not 5000 – 933 donations totalling 1389279.87.

    The problem is that the average amount of the donations exceeding $5000 is $4766.81 which doesn’t exceed $5000. The average of the $1500-$5000 donations is $1489.04. Same problem. It’s almost like some of the donations are missing.

    https://www.elections.org.nz/sites/default/files/bulk-upload/documents/national_party_-_annual_return_2017.pdf

    • alwyn 8.1
      20 December 2018 at 1:47 pm

      Yes, I remember seeing this once before.
      I wondered at the time whether you had to put the donations into the amount categories based on the total amount the person had given but you counted the number of donations as being the number of bits.
      Thus if a person made 4 donations of $3,000 you would put them into the exceeding $5,000 category but count it as 4 donations.
      You see something like that spelled out in section A, for donations greater than $15,000 where some of the 59 donations listed are quite small amounts. It is the total given by a person that determines whether they have to be listed here.
      Not very clear I know but it does seem to explain the numbers.

      • Craig H 8.1.1
        4 January 2019 at 11:01 am

        That’s correct – it’s about total amounts donated by individuals, which can be made up of a number of smaller donations.